Concerns arise about opening online exchanges to veterans

Aug. 27, 2014 - 01:46PM
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While giving all honorably discharged veterans online exchange shopping privileges would be an added benefit, there are questions within the Defense and Veterans Affairs departments about whether some of the profits should also go back to veterans’ programs.

“It’s a great idea, but what do our veterans gain?” said Joseph “Ray” Tober, executive director of the Veterans Canteen Service, which runs more than 200 retail and food operations in VA medical centers. Veterans enrolled in VA’s health care system, their families and certain others can shop at the VCS.

“What do we do to give back? There are some serious challenges for veterans, and how do we help?” Tober said.

If profits benefit only active-duty morale, welfare and recreation programs on military bases, “then most veterans are left out. They don’t have access. These very veterans they are relying on to increase the profits won’t have access to the benefits” of those increased profits, Tober said. “How can we leverage this opportunity to give back to our veteran community?”

The Army and Air Force Exchange Service submitted a formal proposal to DoD on May 14 asking to open online exchange shopping to honorably discharged veterans. There is no timeline for a decision.

AAFES has said allowing 18.8 million vets to shop online could potentially increase exchange revenue by as much as $1 billion a year, thus increasing contributions to military MWR programs.

Among the questions raised, according to one defense source, is how this would affect the VCS.

Tober said. “When we look at issues veterans are facing, such as homelessness, high unemployment ... what do we do for them?”

Like the military exchanges that give part of their profits to military MWR programs, the VCS supports programs like national VA rehabilitation events, Fisher Houses serving VA patients’ families and local veteran activities.

“I’m positive about all this,” Tober said. “Let’s peel back the onion and consider other things.”

Tober said he is initiating talks with Army and Air Force Exchange Service CEO Tom Shull about “developing a business model” to benefit both VA and the military.

The VCS had been working to launch its own online shopping site, so part of the discussion will be about whether it can partner with AAFES online as an alternative.

The VCS is self-sustaining and receives no taxpayer support. If the AAFES proposal is approved, Tober said, the VCS theoretically could lose some veteran shoppers, possibly in rural areas. Its operations generally are smaller than the exchanges, with facilities ranging from 600 to 7,000 square feet, providing items such as health products, beverages and snacks, gifts, stationery and clothing. AAFES and VCS already collaborate to offer access to the online exchange to VCS-eligible veterans. Last year, those vets placed 9,543 orders for a total of $1.1 million in sales, AAFES spokesman Judd Anstey said.

Orders from VCS shoppers made through the exchange catalog do help support veterans programs, Anstey said. AAFES “is willing to continue this partnership for the benefit of veterans, active duty, retirees and all of DoD,” he said.

AAFES can’t directly market to VA patients – only the VCS can.

“AAFES is doing great things,” Tober said. “They’ve opened the door to ... the possibility of doing greater things.”

There are two questions to ask regarding the AAFES proposal, said VFW spokesman Joe Davis. “Does it benefit veterans, and does it help to support vital military MWR programs and VA rehabilitative sports programs in an era of less appropriated funding and intense outside retail competition?

“If the answers are yes, than all sides should put their turf concerns aside and make this initiative work to everyone’s benefit.”

Disabled American Veterans members have passed a long-standing resolution to open commissaries and exchanges to service-connected veterans, said Joe Violante, the organization’s national legislative director. While the online shopping proposal doesn’t go that far, he said, “I believe they would welcome this change and I don’t think they would object to the profits being used to support active duty members and their families.”